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The disaster film epic, The Day After Tomorrow™, depicts a world where global warming triggers an abrupt climate change, creating a global superstorm that unleashes unimaginable worldwide weather disasters. In the span of just a few days, tornados devastate Los Angeles, huge hail pounds Tokyo, and colossal tsunamis and blizzards whip New York. Could it really happen? Could global warming really cause such incredible disasters? Electrifying the global energy system with clean energy is the only way to reach the targets set by the Paris agreement on climate change and avoid the catastrophic scenarios outlined by the recent IPCC report. In an interview with pv magazine, Christian Breyer – Professor of Solar Economy at Finland’s Lappeenranta University of Technology – explains a 100% renewables model is not only technically feasible, but also the cheapest and safest option. With solar and storage at its core, the future energy system envisaged by Breyer and his team will not only stop coal, but also nuclear and fossil gas, while seeing solar reach a share of around 70% of power consumption by 2050. By that time, PV technology could cost a third of its current price, meaning the LCOE cost of energy will be cheaper than non subsidized fossil fuels. Climate change is occurring earlier and more rapidly than expected. With the IPCC report adding a high level of urgency, certain events depicted in the movie will be very real. A world energy system based exclusively on renewable energies and an almost fully electrified world are our only chances to avoid this disaster.

As I see it panel pricing is falling due to an oversupply in the marketplace, lethargic demand in Q1 and projected manufacturing efficiencies from the big tier 1 manufacturers from this year and beyond. This is very much a commodity market with very little buyer preference for brand and quality vs price. The one variable that matters to some customers is availability and if you have inventory that can ship right away that gets a premium in terms of pricing. Most suppliers are unwilling to even quote beyond Q4 not having guidance as to what the pricing trends will look like.

My own take is that pricing will stabilize at current levels and I would not be surprised if prices firmed a bit as current surplus is exhausted and as the cell and ingot suppliers cut back supply to hold pricing. Also the power classes will increase so that 350W 60 cell and 300W 60 cell will be considered standard product. Sub-standard product will be sold at a discount and higher efficiency product at a premium.

Here is my quick napkin list of factors that could affected the PV supply & pricing this year:

• Potentially waning government policy and subsidy support. In a challenging economic environment, governments that face austerity measures could reduce financial support of solar policies and subsidies.
• Potential & ongoing tariff risk on inverters and other BOS. The recent anti-dumping and countervailing duty investigation case in the U.S. could induce further tariff decisions by China and the EU, potentially posing challenges to all companies along the solar value chain.
• Lower than expected global demand for solar modules leading to weaker ASPs. If the global solar market experiences lower than expected growth, then the industry could be faced with a substantial oversupply condition resulting in lower volumes and ASPs. We are seeing this currently on poly modules lowering 2-3 cents/watt from the Intersolar show in early July.
• Polysilicon prices decrease at a slower rate than module ASPs. If polysilicon ASPs decrease at a slower rate than module ASPs, then the company could experience more margin contraction given its high exposure to the spot poly market.

It has been confirmed that a 25% Safeguard tariff will be assessed to modules imported from China effective immediately.

The result is that India will become the 3rd market requires non-Chinese manufacturing. Now non-Chinese production will have to support the US, Europe, and India. This will be very difficult since current South East Asia non-Chinese capacity is around 15 GW per year, but the total demand from the US, Europe and India is likely to be over 40 GW.

I’m not sure what to expect in the US, but all signs point to a product shortage and increasing prices for the remainder of 2018 and into 2019 until additional capacity can be brought on or something else changes that mitigates the MIP in Europe, 201 tariffs in the US and now the safeguard tariff in India.

Sophomoric Solar World was in the news twice during this two week period leading to Good Friday. As you obviously know, Solar World Americas was part of the effort that convinced President Donald Trump to impose tariffs on imported panels. Now, Solar World Industries GmbH is seeking an exemption to those duties. Is your head spinning? Does this remind you of “Days of Our Lives” (the solar version)? Well, it should since Solar World GmbH, on March 22nd made an appeal to the Office of U.S. Trade Representative claiming that their “high-quality modules” cost more than the cheap Asian products that prompted the trade dispute. And to add insult to injury, SW GmbH, just announced bankruptcy again! With this, the company is reacting, among other things, on further decreased market prices and European Commission’s intention to terminate measures against dumped solar imports from China,” the German company said. Not sure what to make of this, but it seems as though both divisions attempted to “regulatory suicide bomb” the US market knowing that like the financial health, production and operational efficiencies and technology road map to truly be a viable competitor in the global market. Only time will determine whether their “bomb” was lethal or merely just a short-term industry headache. As I see it, it's completely the later.

Our industry, is collateral damage to the political narrative of the White House. We're equal opportunity employers: -we think all American jobs are good jobs and that we should grow all jobs and not attempt to protect a few that are questionable to begin with at the expense of many more verifiable jobs. On the tariff itself, it is ironic that those who claimed the need for it will not be protected. Suniva needs cash to support a failed business plan. Imported modules that are levied a 30% tariff will not solve that. Suniva will fade away without creating any manufacturing jobs. Yes, some Chinese companies will setup fully automated manufacturing here in the USA that will eliminate smaller module players like Suniva who do not have the scale or know how like the big Tier 1's. Of the range of outcomes, the tariff proposed at 30% is a more workable outcome. The biggest win is uncertainty is removed and we can go back to business.
My team will be monitoring prices closely with our module partners and will let you know as we hear more. Until we hear from those partners, we’re able to honor current pricing - so let’s get whatever you need fulfilled now. Call or email anytime. Yousri

This report obtaining by Politico is the distant clamp of thunder before the storm. Politico obtained a document from an unnamed source at the White House signaling the defense of tariffs and laying the groundwork for punitive tariffs on Chinese-made solar power equipment — a step that would promote the president’s “America First” trade agenda while sharply increasing the costs of solar power in the U.S.. The paper argues that China has used our ITC and other incentives to unfairly profit from our adoption of solar power and use our ramp up to establish a toe hold on infrastructure initiatives in the developing world. It also blasts China for protecting its own supply chain which includes imposing its own tariffs on polycrystalline. This doesn't look good for our industry and it's easy to procrastinate on the need to reach out to your elected official to voice your opinion on these matters, however, this is the 11th hour before huge changes occur, so please be informed and active in your local or regional SEIA chapter.

The Section 201 now has a later deadline. On Tuesday, the USTR requested a supplementary report from the USITC. This extends the deadline for a Presidential decision to 1/26/18 vs. prior of 1/12/18. The USITC has 30 days to deliver the report, and the President has 30 days after delivery to take action. That said, the President could issue an order before the deadline.

The Senate could introduce a new change for solar/wind tax equity investors. Yesterday, the Senate recorded a party-line 52-48 vote to begin a 20-hour debate period after which the Senate will begin voting for final amendments. Notably, although the Senate bill preserves solar and wind tax credit and commence-construction rules, it also includes a "base erosion tax" that ignores tax credits below a minimum level for some taxpayers, particularly investors that make deductible payments to foreign affiliates. We've heard that this could reduce some investor demand for tax equity by as much as 50%. That said, we understand that an amendment supportive of renewable tax credits has potential and could avert this downside scenario for the solar & wind sectors. If the Senate bill passes, the House and Senate will start reconciling the separate bills.

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